November 4, 2021

Here's What Investors Look At Before The FOMC Meeting!

 Counting down the seconds of the Federal Reserve’s (Fed) latest monetary policy announcement, analysts assessed several possibilities to be decided at the FOMC policy meeting early Thursday morning.

The U.S. central bank is widely expected to announce a $ 15 billion drop in its monthly bond purchases from the current rate of $ 120 billion after giving hints about it at an earlier meeting.

However, according to analysts, the decision for the reduction is not the main factor that will bring big movements in the market as this has been expected for months.

Instead, Chairman Jerome Powell’s statement will be heeded to get an indication of when this reduction in bond purchases will end and interest rate hikes will begin.

However, if the reduction figure is made larger than expected, then it is not impossible if the US dollar acts aggressively during the New York trading session.

With rising price pressures, the Fed may not take a smaller step but given the new highs in the U.S. stock market, investors also don’t expect a significant hawkish stance from the central bank.

Following the expected reduction of $ 15 billion per month, the implementation of the bond purchase is likely to end in mid -2022.

Moreover, analysts think Powell will likely reduce the need to raise interest rates, but the latest statement on inflation will serve as a guide by investors for the Fed’s next move.

The dot plot, which the Fed uses to signal the outlook for interest rates, will also be scrutinized by investors if there are policymakers who support a rate hike earlier than expected.